The document summarizes Lucia Cusmano's presentation at the AECM Annual Seminar in Berlin on June 19, 2015 about building a conducive environment for innovative small- and medium-sized enterprises (SMEs). It discusses challenges SMEs face such as access to finance and regulations, and how business investments have shifted to non-OECD countries. It also outlines an OECD project to benchmark SME performance and business environment policies across countries to help address these challenges.

1. AECM Annual Seminar
Berlin
19 June 2015
Building a conducive environment for
innovative SMEs
Lucia Cusmano
Senior Economist
Secretary to OECD Working Party on SMEs and Entrepreneurship (WPSMEE)
OECD Centre for SMEs, Entrepreneurship & Local Development (CFE)

2. OECD Ministerial Council Meeting 2015
Unlocking Investment

3. Sustaining investment in innovation
Business investment in knowledge assets slowed, but weathered the
crisis better and recovered earlier
(Index, 2005=100)
Source: OECD (2014) based on OECD National Accounts.

4. Attracting investments
Investments shifting to non-OECD countries
Source: OECD Economic Outlook, 2015/1

5. Channelling liquidity into productive investments
The puzzle
 Stock market boom: asset prices rising in response to zero
interest rates and quantitative easing
 Stagnating productive investments: uncertainty and high
risk perceived by investors
 Emergence of new financing instruments: expanding (from
a low basis) and engaging new (sometimes unexperienced)
investors
 Growth capital gap for businesses: heavy reliance on
traditional debt to fulfill investment needs

6. Investment for sustainable and inclusive growth
• Sustain the cyclical recovery, which is still fragile
– subdued actual and expected demand
– lingering uncertainty
– remaining excess capacity in many areas
• Increase productivity
Labour productivity growth
Less investment
 Scarred labour markets
and de-skilling
 Slower diffusion and
embodiment of new
technologies

7. What are the main constraints for SMEs?
Finance … and beyond
The most pressing problems faced by euro area enterprises
ECB Survey on Access to Finance, April-September 2014
% of respondents
Source: ECB (2014)

8. The business environment matters
(and so structural reforms)
Main components of importance for SMEs
• Navigating and complying with
regulation
• Dealing with taxation
• Protecting rights and enforcing
contracts
• Building trust in institutions and
public services
• Implementing anti-corruption
practices
• Standing fair competition
• Finding customers
• Overcoming barriers to
international markets
• Accessing public markets
• Accessing finance
• Finding appropriate skills
• Sourcing knowledge,
technology and innovation
• Managing intellectual assets
• Managing energy costs

9. OECD project on
Benchmarking policies for stronger SME performance
Objectives
• Enable countries to benchmark their SME performance and SME
business environment conditions internationally, and draw links with
policies.
• Fill an important information gap on SMEs.
Pilot project (2015-16)
Phase 1. SME business environment scoreboard for OECD countries
Phase 2. Comparative assessment of selected policies targeted to SMEs in
pilot countries (Canada, Israel, Portugal and the UK)

10. SME business environment scoreboard

11. Thank you
Lucia.cusmano@oecd.org